STAFF TRANSITION

Telkom Direct

2011/12

Purpose of Presentation

To consult Organised Labour about the closure of some Telkom Direct Stores and redeployment of all impacted

staff to other available opportunities, with minimum disruption to employees’ lives

Context: Store Closures 2011/12

Strategy embarked upon in 2010/11 re 1&2 Man StoresContinuation of 2010/11 strategy into 2011/12Difference 2011/12 vs 2010/11 re opportunities created by the VERP/VSP processClosures intended to occur at lease expire date, but due to VERP/VSP impact moved earlier VERP/VSP also impacted other stores where rebalancing opportunities are currently being investigatedConsultation to take place once detailed analysis had been completed

Strategy – 1&2 Man Stores

The decision to not continue with leases of 1&2 Man Stores in 2011/12 comprise of a combination of factors:

• Existing customer base in area

• Future growth opportunities in area

• Not commercially viable as a business entity from a access network point of view

• Alternative channels are available to customers in area

Impact on Telkom Direct 1&2 Man Store Strategy

• Ten (10) 1&2 Man Stores earmarked for closure in 2011/12

• Four (4) of these stores were impacted by VERP/VSP applications

• This to result in earlier closure than lease expiry dates

• Early closure of remaining 6 stores to enable rebalancing of resources to fill gaps left by VERP/VSP departures

• Total of 18 staff impacted by closures of which 5 already left as per their VERP/VSP applications.

• Remaining 13 staff to be redeployed

List of Impacted Stores & Staff 1 & 2 Man Stores

Store Location Number of staff in shop

Number of staff (VSP/VERP Approved)

Possible relocation to identified shop

1. Ficksburg TDS 1 1 N/A

2. Harrismith TDS 2 0 Bethlehem TDS/ Bloemfontein TDS

3. Escourt TDS 1 0 Pinetown TDS

4. Vryheid TDS 2 0 Davenport TDS / South Coast Mall TDS

5. Hazyview TDS 2 0 Nelspruit TDS

6. Swellendam TDS 2 2 N/A

7. Empangeni TDS 2 0 Richardsbay TDS

8. Phalaborwa TDS 2 1 Polokwane TDS

9. Modimolle TDS 2 0 Witbank TDS

10. Meyerton TDS 2 1 JHB City TDS

Total 18 5

Transitional Principles• Total of 13 employees impacted

• All impacted employees to be accommodated

• Proposed transfers will be to the nearest store where staffing opportunities exist due to business need:

• Transfer/relocate to identified regional critical vacancies or regional opportunities.

• Transfer/relocate to identified national critical vacancies or national opportunities

Transitional Principles (Cont)

• Transfers to be done with minimum disruption to employees

• Where applicable, relocation benefits will apply

May 2011 - Company Forum

Process to Follow• Establish Regional Task Teams consisting of TDS Line Management, HR, ER and Organised Labour to oversee staff rebalancing

• Impacted staff briefed by Regional Task Team

• These employees to exercised their options and communicate their decisions

• Complete implementation prior to 30 July 2011

Points to Consider

• No employee is redundant as a result of these changes.

• Transfer Benefits as per the current Transfer Policy.

Thank You